Would it be considered racist if a store owner believes all Canadians are thieves and does not let any Canadians into his store? Racism pertains to discriminating based on race, and (correct me if I'm wrong) Canadians are not a race. What would be an appropriate word to describe an individual such as the store owner?

The discrimination is specific to Canadians, not foreigners in general. I'm looking for a word that could be applied to someone who lives in the country they discriminate against. For example if a Canadian announces "all Canadian culture is stupid!" what would that be called?

Racism is often used to describe discrimination only loosely connected to ethnicity, like nationality or creed.
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Bradd SzonyeMar 26 '14 at 5:46

I think you could avoid suggesting racist altogether and asked what to call such a person, instead.
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KrisMar 26 '14 at 6:12

'Racism', like 'democracy' is a highly contested term. It can mean any one of a variety of beliefs and practices. The only thing certain about it is that it is abusive to call someone a 'racist'. In Britain in the 1970's a Sikh boy was suspended from his school for wearing a turban. It appeared to be a clear case of breach of the Race Relations Act. However the Court of Appeal held that to be a Sikh was not a matter of race but of religion, and whilst it was unlawful to discriminate by race, it was perfectly lawful to do so by religion. The law may since have been changed.
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WS2Mar 26 '14 at 6:21

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I'd simply call him a bigot. Racism is one form of bigotry.
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keshlamMar 28 '14 at 5:36

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There are many kinds of bigotry and discrimination. Not all of them are specifically given their own names.
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Mr. Shiny and New 安宇Mar 28 '14 at 13:12

I'm not sure if that's what I'm looking for. For example if the store owner in the example moved to Canada but still had the same mentalities, then he would not be a foreigner.
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CeleritasMar 26 '14 at 5:05

@Celeritas I disagree, he would be even more of a foreigner because he is not living in his native land. "You can live in a stable, it doesn't make you a horse." Of course he could live there legally as a citizen, maybe hold a Canadian passport, but culturally he would be very different from his Canadian neighbours. Especially if he thought they were all thieves!
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MynamiteMar 26 '14 at 8:49

Someone is not a xenophobe if they believe that some foreigners (e.g. Canadians) are inherently bad while other nationalities (e.g. Australians) are good. To be a xenophobe you need to believe that all foreigners are bad.
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DJClayworthMar 26 '14 at 14:51

The definition of racism is very fuzzy, partly because the definition of race itself is fuzzy, partly because the definition of discrimination is fuzzy, and partly because racism and other kinds of bigotry tend to go hand in hand.

While most conceptualizations of racism include the notion of “race based discrimination,” the exact definition is controversial both because there is little scholarly agreement about the meaning of the concept “race,” and because there is also little agreement about what does and does not constitute discrimination.

Wikipedia goes into some detail on this confusion. This part is particularly relevant to the question at hand (emphasis added):

Among the questions about how to define racism are the question of whether to include forms of discrimination that are unintentional, such as making assumptions about preferences or abilities of others based on racial stereotypes, whether to include symbolic or institutionalized forms of discrimination such as the circulation of ethnic stereotypes through the media, and whether to include the socio-political dynamics of social stratification that sometimes have a racial component. Some definitions of racism also include discriminatory behaviors and beliefs based on cultural, national, ethnic, caste, or religious stereotypes.

So not everyone agrees, but if you wanted to call the scenario in your question racism, you surely wouldn’t be alone.

Technically believing that Canadians are bad is not racist, as Canadians are not a race - and are made up of many races. However the word is used in this situation, since there doesn't seem to be a viable alternative. 'Nationalist' means something else, and 'xenophobe' applies only if the prejudice is directed at all foreigners.

Since the American Civil War the term "discrimination" generally evolved in American English usage as an understanding of prejudicial treatment of an individual based solely on their race, later generalized as membership in a certain socially undesirable group or social category.

So it can be applied to any kind of group including nationality.

For the second question:

internalized oppression is the manner in which members of an oppressed group come to internalize the oppressive attitudes of others toward themselves and those like them.

For example, sometimes members of marginalized groups hold an oppressive view toward their own group, or start to believe in negative stereotypes. Examples include internalized racism and internalized sexism

internalized discrimination is used in fair amount of sources as well.

What I believe we are moving towards, in most countries is a 'general law of discrimination'. It is quite ridiculous that race or religious discrimination is unlawful, but that an employer or another can discriminate as much as they like on the basis of social class, physical appearance etc. One of the most discriminated-against groups are women who are considered not to have good looks, good bodily proportions etc.
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WS2Mar 26 '14 at 6:28

Distinctions can be made between RACE and ETHINICITY in the context that Race is generally used in Biological terms like the Colour, height, Facial structure etc of the indigenous natives of a particular place but Ethnicity can better be explained in terms of traditions which can be caused due to the weather, climate, topography of that area like the food habits, pattern of clad and clothing etc.

Racism is a broader concept but still it can be used rather than Xenophobia( usually Phobia is used for fears, a person who fears from the people of other countries) but Bigotry is better in case of that store keeper because may be in Canada there can be some people of the same Race which that store keeper belongs to.